SUMMARY: Marketers at RCA who distribute the American Idol II and Kelly Clarkson albums are in the midst of testing a new relationship marketing tactic: Offering a desktop app that fans can download to get more news about artists on a regular basis.

If you are involved in loyalty marketing in any industry, this article may be useful for you. Applies to high-tech, finance, pharmaceutical and many other industries.

If you are a newsgeek, you may remember back in the mid-1990s when a much-trumpeted service called Pointcast offered news delivered straight to your desktop.

Loads of people in corporate America downloaded the application so they could have headlines streaming across the bottom of their PC screens all day. It was pretty exciting stuff in those pre-dot-com-boom days.

It was also a huge bust, partly because the service took up enough bandwidth to bring some companies' servers to their knees. That, coupled with a coincidental wave of computer viruses, caused IT departments across the US issued proclamations: "No one is allowed to download anything from the Internet ever again."

Marketers' and publishers' focus switched to building great Web sites that people could be enticed to visit, and sending great email that people could be enticed to open.

However, over the past year several companies have come out with new technology, promising in effect to be the Pointcasts of the future.

Why should you care?

Because in some cases, these desktop offerings can supplant, reinforce, or even do better than email, especially for loyalty campaigns.

Although all the techies said, "No way will consumers want to download anything," it turns out they were wrong. Consumers, in fact, appear to love these desktop apps.

a. Story: 40% of consumers download Kelly Clarkson's app

b. Ideas: How apps can be used by marketers in other industries

c. Sign-ups: Driving people to sign up for your app

-> a. Story: 40% of consumers download Kelly Clarkson's app

Eight days before American Idol winner Kelly Clarkson's first CD ROM was due to be pressed, marketing execs at RCA who had been toying with the idea of creating a desktop app for an artist decided now was the perfect time.

Clarkson was an extremely high profile release, and she was under contract to do several more albums.

They hoped a desktop app would help them keep Clarkson fan loyalty high between her releases, and boost new release sales someday when she did not have the giant publicity, of having just won the TV show, at her back.

Why not just rely on email?

You can not send streamed video, audio, or an ecommerce "buy now" form and be sure it will get through properly to all consumers. You also can not send ultra special one-time announcements and assume everyone who is deeply interested will notice them if their box is full of other stuff.

However, you can do these things with a desktop app, something which appears as an icon on a consumer's desktop or as part of their Net surfing toolbar.

It can sit there quietly, and flare into life to alert consumers when there is something new they should see. (Example: Weatherbug's chirping sound when there is big storm news.)

Working with Arcavista (one of the companies who develop these apps) RCA built a link to the download into the CD, and Clarkson's Web site.

It was barely marketed. A sticker on the outside of the CD which lists six songs inside, also mentions, "Link to exclusive Kelly Clarkson Updates and Video Footage!"

Once you peel the sticker off, you have to squint to see the URL elsewhere in the packaging.

RCA was hoping that many CD buyers would pop them into computers instead of stereos to listen, and when that happened, a little offer would appear on their PC screen. They could click to see the video and get updates. (Link to screenshot of art below.)

Once they clicked and signed up, consumers would then be alerted whenever Clarkson's managers had something of real interest for fans, such as an upcoming appearance on a major TV talkshow or a new video.

"It's a loyalty application. It's about crafting communication to build an affinity to a brand or a relationship. I won't send something if there's a yet another new article about Kelly or something else they can find on their own. It's more along the lines of 'Kelly's appearing on David Letterman tonight.'"

In other words, use email and Web site news for average ongoing stuff, and reserve your desktop app for the big stuff as you might use a telegram versus a regular letter.

Initial results: Almost 40% of consumers who bought the Clarkson CD downloaded the app, many of them from computers at work.

Now the waiting game begins to see if the effort paid off. Some metrics we look forward to reporting in future:

o Are app users more likely to purchase another album?

o What is the average lifetime of an app account (before people switch or wipe computers)?

o What is an average "open rate" for a user clicking to see what info the app has to share?

-> b. Ideas: How apps can be used by marketers in other industries

Arcavista's DeGanon says the funny thing about the whole Clarkson story is that he had assumed business-to-business marketers would be the big users of this tech. Pop stars did not occur to him.

Here are some industries that could use desktop apps such as Clarkson's to grow loyalty and sales:

o High-tech companies who want to get news about upgrades, white papers and Webcasts out to loyal customers and key prospects. (Some software companies are already doing this using home-built apps.)

Encouraged by the Clarkson success, RCA tested incorporating a similar desktop app offer in their American Idol II compilation album recently released. Interestingly, about 20% of purchasers are downloading it.

This shows that the more personally a buyer feels about a brand (or entertainment artist) the more likely they are to download the application. A compilation album clearly does not drive the same incipient loyalty that a single artist album can.

DeGanon does not think this is a useful technology for someone selling on a strictly commodity-level.

"The self-qualification of users is such that you only get people who have a real desire for this level of communication with the particular brand. For example, in an airline universe if you get someone who downloads every single communicator from every airline, they are not your target. They are not a valuable client for you. They are simply looking for the best deal and the best price."

Ipso facto have little or no brand loyalty to start with.

When encouraging sign ups (or downloads) you want to focus on your core group of loyal customers, buzz builders, and potential clients. It is not about getting zillions, it is about getting the best group.

These are your most profitable accounts by far anyway, so it is worth the extra investment.

How do you get them to sign up?

DeGanon suggests offering an incentive, just as Clarkson offered the video download. "People have absolutely no problem making a decision to install a piece of software that provides perceived value."

Our own suggestion is, consider advertising your offer to a group of people who have already proven they are desktop app users. For example, you could buy ads on Entertainment Tonight's Instant ET communicator, or Weatherbug.

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